Large US Market Now Open to Livestock Feed Antibiotic Replacement

Antibiotic resistance is a major health threat worldwide and many countries have banned or are banning the use of antibiotics as growth promoters in livestock. The European Union led the way in 2006, while in the U.S. the FDA put forth rules in 2017 curtailing its usage, but a lack of effective alternatives has been a roadblock.

Canada-based Avivagen Inc.'s (VIV:TSX.V) proprietary OxC-beta™ Livestock premix for livestock feeds is a non-antibiotic means of maintaining optimal health and growth. Its use in Asia has been growing rapidly, and Avivagen recently announced a partnership with CSA Animal Nutrition for sales and distribution of the product in the United States. The U.S. market comprises 20% of the worldwide livestock feed market.

"We're very excited to be entering into this important relationship that will bring OxC-beta to this crucial market and allow for the sale of OxC-beta within the United States," Kym Anthony, chairman and interim CEO of Avivagen stated.

"With CSA's extensive technical experience and relationships and ability to access the U.S. livestock and poultry markets, CSA represents a strong partner for Avivagen. The timing is good given the regulatory process in the U.S. is now completed and we look to add sales and distribution networks in new markets to significantly drive our sales," Anthony added.

A panel of experts following specific government guidelines determined that OxC-beta qualifies as self-determined "Generally Recognized as Safe" (GRAS) in U.S., thereby clearing its way for distribution within the country.

Under the terms of the agreement, CSA will "coordinate commercial scale validation research with potential customers and fulfill a sales and distribution role with OxC-beta for poultry, swine and dairy cattle in the United States."

Avivagen notes "CSA's unique business model provides nutrition solutions and services for meat, milk and egg producers, feed manufacturers and nutrition consultants. As an independent, science based and customer focused firm, CSA's priorities are driven by nutrition for the animal and economics for its customers, providing quality solutions, services and products for a wide range of customers."

CSA's agreement with Avivagen specifies minimum performance targets for the first three years (the agreement can be found at www.SEDAR.com), which if met will greatly enhance Avivagen's sales volumes going forward. Year 4 and 5 targets are to be negotiated in year 3.

"This is a very, very exciting time for the company, both in the ability to sell in the U.S. and to have somebody as credible as CSA partner with us," Anthony told Streetwise Reports. "Having these minimums in both poultry and swine for next three years would mean a huge jump in sales."

In addition to the U.S., OxC-beta is available for sale in the Philippines, Taiwan, New Zealand and Thailand.

"We are also seeing increased usage by our partner in the Philippines, UNAHCO," Anthony relayed. "UNAHCO continues to grow its market share within the Philippines, which we believe in part is due to it being able to offer OxC-beta, as its competitors are now asking for the product as well. We believe that this is a very strong indication as to how things will proceed in other markets, given that once customers start to use it, they see how well it works. Additionally, UNAHCO is expanding its market by adding OxC-beta to its premix for sows in the Philippines."

"We did a study around sows," Anthony stated. "It started 30 days before farrowing; in the sows' milk the somatic cell count was down, protein was up, and maternal antibodies were significantly increased. The litters were born bigger and healthier and had less diarrhea, which is how we measure effectiveness during the nursing period. The sows themselves were healthier, bigger and had more back fat; 10% of them returned to estrus earlier. The piglets faced weaning, which is the most vulnerable time, a lot stronger and healthier."

"Use in sows represents a promising new opportunity that is quite apart from any role as an antibiotic replacement," the company noted. "The application in sows is based on direct health benefits that cannot be achieved using antibiotics."

A typical sow will eat a ton of feed a year, so the sow market represents a very large new opportunity.

Avivagen noted that it intends to accelerate market access and the commercial uptake of its OxC-beta, "a product that has the potential to eliminate the use of antibiotics as growth promoters in livestock feed, which is a problem that needs an urgent solution and which represents a multi-million dollar market opportunity." According to the company, many new customers throughout Asia are actively conducting confirmatory trials.

"It is our belief other countries such as Brazil, which is the third largest feed market in the world, and Mexico, are advanced in their regulatory process." Anthony stated.

In addition to OxC-beta, Avivagen sells Vivamune Health Chews in the U.S., Canada and Vietnam for companion animals, such as dogs. It also has begun discussions with nutraceutical companies to develop products for human consumption.

Disclosure:

1) Patrice Fusillo compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.

2) The following company mentioned in this article is a billboard sponsor of Streetwise Reports: Avivagen. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with Avivagen. Please click here for more information.

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5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Avivagen, a company mentioned in this article.

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